DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
89
specialists and SMEs, in the latter case perhaps through industry associations in a “train-the-
trainer” mode, covering both Islamic and conventional trade and supply chain finance.
The precedent for – and value of – such initiatives is well established in the context of IFI trade
capacity development programs with bankers in emerging and developing markets, and every
indication is that the competency gap in evidence in most markets across the globe is also
present in many OIC Member States.
The value of this recommendation is in the translation of expertise, to greater access to
financing for SMEs and commensurate increase in trade flows and economic value-creation
across OIC Member States.
Practices and programs are well established and it should be quite feasible to design an
appropriately tailored set of training programs for delivery in OIC Member States, leveraging
the learning of program to date.
The cost of trade finance training can be significant given the lack of domain experts globally.
Ten week-long programs might be developed, designed and delivered for US $75,000 to
150,000.
Recommendation 7: Analysis of the Bank Payment Obligation
It is important for OIC Member States to look at leading edge solutions in trade and supply
chain finance, certainly to keep pace with developments in the market, but also, and more
importantly in the short term, to explicitly assess the potential of the BPO as a cost-effective,
operationally efficient solution for the trade needs of SMEs in Member States.
It is recommended that analysis be initiated and aimed at identifying ways to apply
innovations such as the Bank Payment Obligation to the challenge of SME access to finance,
based on existing case studies, and on the recent engagement by the Dubai Chamber of
Commerce in facilitating access to the BPO for its members.
The analysis phase of this recommendation could be completed for US $25,000 or so, while the
cost of actually deploying the BPO has been described as very affordable, even for developing
and emerging market economies. Cost elements include a SWIFT fee depending on the
deployment and configuration of the system, along with technology investments that may need
to be made, to bring this solution online.
Recommendation 8: Increasing Trade Finance Capacity
As indicated earlier in this document, limitations on capacity related to trade finance are
already impacting the ability of companies to access trade finance, and it is expected that
several developments in the market, globally, will constrain the availability of trade finance, or
at a minimum, raise the cost of trade finance activity to levels that are no longer commercially
viable for SMEs.
OIC Member States must take proactive and prompt decisions related to whether OIC Member
States might require additional trade and supply chain finance, and if so, on what basis.